OTIS ELEVATOR: ACCELERATING BUSINESS TRANSFORMATION WITH IT

GROUP03,SECTION-C

SUMMARY

The case is about the migration of OTIS from the manufacturer of elevators and related products to the
service provider to the customers using these products. The rationale behind the same was as mentioned
below:

 The service market was more steady and profitable than the manufacturing business as the U.S. and
Western European elevators market were mature and growth in new-elevator sales was majorly
coming from the emerging economies
 OTIS had figured out that beyond a certain minimum expected level of product reliability, the
customers cancelled maintenance agreements because of dissatisfaction with the quality of service
and not the quality of product

To achieve their objective, they engaged in continuous transformation of their business processes with the
help of IT to improve innovation, quality, cost and speed. OTIS started out with OTISLINE, a centralized
customer service system, and later introduced the e*Logistics program to facilitate the business process re-
engineering and information transformation and thus, achieve the continuous transformation. It introduced
other such programs to achieve efficiency and effectiveness

GAIN IN TERMS OF EFFICIENCY OF THE ORGANIZATION

 REM elevator monitoring communicated the problems well in advance to the computer head quarters
and so the problems could be fixed before the elevator went out of service
 OTIS implemented BHAG (Big, Hairy, Audacious Goal) for achieving five-fold improvement in the
order-to-hand-over cycle
 The SIMBA program was introduced to change the product architecture and finally the design process
 The ACE (Achieving Competitive Excellence) program empowered employees to identify and solve
problems while at the same time practising continuous improvement
 Through SIP (Sales and Installation Process) best practices were identified from most successful
sales offices and were converted to standard processes across the organization
 E*logistics facilitated the business process re-engineering that was taking place throughout the
company by automating the processes and workflow of activities which were the part of Project
proposal, Sales Processing, Order Fulfilment, Field Installation and Closing activities
 CLCs (Contract Logistics Centres) became the centres of expertise around markets and their
respective product models and could order from multiple subsystem integrators—wherever they could
find the lowest cost for required quality and delivery times

GAIN IN TERMS OF EFFECTIVENESS OF THE ORGANIZATION

 The senior management could easily spot and manage the difficult situations through OTISLINE and
thus could provide more effective quality service to customers
 The SIMBA program reduced the number of modules in use and lowered project costs throughout the
value chain
 Using the E*Logistics, OTIS moved from the push system to the pull system and was able to maintain
lean manufacturing flows and low inventory levels